CALGARY — WestJet Airlines Ltd. is close to forging a new partnership with a U.S. airline as it seeks to draw more international traffic into its network, the carrier’s new chief executive officer told investors Tuesday.
“In the United States we have negotiations ongoing for a partner,” said Gregg Saretsky.
Saretsky added the Calgary-based airline (TSX:WJA) isn’t ready to provide any further details.
“But we are just on the verge of being able to announce something there,” he said.
Earlier this spring, WestJet and another would-be partner, Southwest Airlines (NYSE:LUV), called off a deal that had been in the works for two years.
On the surface, it would have appeared WestJet and Southwest would have been an ideal match. Both fly only one type of aircraft in their fleets — the Boeing 737 — and both pride themselves on their fun-loving corporate cultures.
Airlines often join forces in what are called code-share arrangements. Code-sharing essentially enables airlines to sell seats on one another’s flights, allowing passengers to seamlessly transfer from one carrier’s network to another.
Code-shares are often preceded by interline pacts, in which two or more airlines agree to collaborate on baggage handling and other tasks.
Last month WestJet and Hong Kong-based Cathay Pacific signed an inbound interline agreement, in which travellers from Asia can connect to various cities in Canada.
Saretsky said such partnerships are key to WestJet closing the gap with its chief domestic competitor, Air Canada (TSX:AC.B).
“Every guest that gets off a Cathay Pacific plane and boards a WestJet flight in Vancouver going to Calgary or going to Toronto is one less person boarding the other guy.”
As that relationship grows, WestJet will have enough traffic to justify flying more frequently between Vancouver and Toronto, for example.
“Code-share and interline is a way of bringing offshore traffic into the mix so that it can help drive the type of schedule parity that will be important to closing the gap on frequent guests that are travelling for business,” Saretsky said.
In April, WestJet said it signed an agreement with Delta Air Lines with an option to acquire slots at New York’s LaGuardia Airport, but that a partnership deal had not been reached.
Meanwhile, Saretsky said WestJet is in the early stages of examining whether it’s possible to bring broadband wireless capability onto WestJet flights.
“Canada doesn’t have the infrastructure to support it yet. It’s going to require an investment, so our discussions have been focused around who makes the investment? How quickly can that happen?” Saretsky said.
“We believe this would be very in keeping with WestJet’s brand in terms of being able to bring productivity to the in-flight experience.”
Saretsky took the helm of WestJet in April, when his predecessor, Sean Durfy, resigned for personal reasons.